Asia-Pacific LNG Demand to Expand

Asia-Pacific demand for natural gas is expected to grow at a compounded rate of 4.9% over the next decade. This is higher than the global growth of up to 2% for the same period. Experts said the region's increased growth is due to its changing climate policies, which call for reductions in C02 emissions.

Liquefied natural gas (LNG), which produces one of the lowest carbon emissions among fossil fuels, will be in a sweet spot to benefit from the policy changes.

Emerging markets China and India are switching to the environmentally friendly LNG. Currently, key markets include Japan, South Korea, Taiwan and Spain, which combined account for 70% of all LNG imports.

In China, gas represents only 3% of its total energy needs, according to Malaysian Gas Association and International Gas Union President Abdul Rahim Hashim. But, he added, even if the proportion of China's energy needs met by gas grows by another 1%, "it actually is a huge market for gas and other fuels. . .but more so for natural gas."

Meanwhile, other experts questioned whether global LNG demand can be sustained. "In the short term, supply may outstrip demand as a result of the recession," said Hashim, citing the sluggish economies of South Korea and Taiwan dragging demand for LNG. However, beyond 2012, experts believe demand will match supply again as the economy picks up.

Natural gas accounts for 23% of global energy needs so far this year and is expected to reach 24% by 2020.